Economists acknowledged the performance was better than they had expected.

"Going forward, I expect GDP growth to remain firm for the next two quarters before moderating towards the year-end," said Shuchita Mehta from JP Morgan India in Bombay.

But others noted the risk looking ahead.

"We're sticking to our overall growth forecast of 4.6%," said Sanjeet Singh from ICICI Securities and Finance in Bombay, "because the two main risk factors of poor rainfall and a global slowdown are yet to be reflected."